who ruined the US markets ?

[sellindexvol66]

Quote from nazzdack:

1) Difficulty on your part does not mean impossibility on someone else's part.
2) Have some more cheese with your whine. The limburger would pair nicely with the Boone's Farm.

hey nazz..he didn't say no one can earn here...

granted the 2008-2011 vols were nuts...but as a "typical mean reversion trader"(i happen to be one of them) some vol higher than this yr is better. . i'm trying to adapt myself, but if not for my higher capital base it would be very hard to make a living in this ben put scenario.

kudos to you that you can excel.

 

[austinp]

Quote from sellindexvol66:
kudos to you that you can excel.

Save your assumed kudos... he ain't excelling, no danger of that.

As for volatility being down? sure it is, to the degree of 2005 - 2006. Those years weren't the greatest either, but they were still easier to trade because price action was less v-turn drastic back then.

ES total ranges many days in 2006 were 6 to 8 points and that was it, but ER2 (now TF) was rockin' and FX was rockin' and CL was rockin' regardless. Now everything is flat as pancakes much of the time... with scant few true directional moves interspersed.

Markets have more prolongued dead spots now than any time in modern electronic trading history. So it takes more patience, more discipline, more trade turns and larger trade size to make less money than before... but there is still money to be made.

 

[sellindexvol66]

austin, my point is that's it's "harder" , that's all.


i'm still making ok money , but i agree with iceman that more vol would be better for those of us who are having a harder time being "patient" lol

 

[denner]

Quote from ammo:

the largest firms,gsachs,jpm,ms,merill,bs leh,were not acting as one before 08,with ml getting absorbed, bear stearns and lehman the two who would habitually target the others large asset accumulation,left out of the tarp dist and forced to die ,it is now much easier for the fed n the largest banks to work together ,and the banks couldn't make new loans with the tarp to profit with the debt they had in re and commercial re,they intentionally and masterfully created there own symphony where they would accumulate ,sell,turn, distribute and reaccumulate equities and commodities all in beautiful unison,what is now left is them with the lions share of the wealth,and the workers, retail and smaller funds,decimated to the point where there is no one to profit from other than each other,the question is where will rome try to conquer next..that and $4 will get me a starbucks coffee

Yes, I think this is the jist of it...also, real trading volume (not the noise of hft playing ping pong) is a pittance of what it was say 10 years ago. Of course, this would be next to impossible to prove, but it's just an observation (also notice how many ET'ers have left), prop shops closing, etc, etc...

In 97-00 or so, you had real retail participation, plus prop traders and the growth of alot of hedge funds...hence there was more predictability to how PEOPLE would react to various price points, chart formations, etc, etc...I can attest to what the OP says about a different rhythm to trading...

 

[denner]

Quote from austinp:

Markets aren't "ruined" per se... but they are nowhere near bountiful as before

Price movement has changed dramatically in several ways. First of all, average daily ranges have contracted to half or less from years past. That's one major difference now than before... overall intraday ranges are much smaller, so average potential profit is likewise much less.

Secondly, price swings cover more sideways distance thru these contracted ranges. Some call it "chop". Whatever the label, price action moves against longs or shorts far enough to take out stops repeatedly, but does not move far enough in favor to reach profit objectives nearly as often.

So now more than in the past, stop loss orders are harder to hold while profitable trades are fewer than before. Skews the win/loss ratio against traders relative to large-range, higher volume markets.

With low-volume price movement, the directional turns are much more rapid and abrupt. Because there is no density of resting orders in the market, a price peak at highs or lows tend to v-turn and fire off the opposite direction now.

In the past, price turns would unfold in more deliberate rounding tops or bottoms, double tops or bottoms, 1-2-3 swings. Now it is much more "traps" and "springs" in rapid v-turn fashion. That makes it tougher to change directions with deliberation because one minute price is going one way, two minutes later it is flying the opposite direction.

Lastly, all markets tend to make zero to two directional swings per session and then shut right down into dead consolidation. Years past when volatility was high, price action swung around numerous times all day long more than not. Now that is a rarity of all-day opportunity.

Anyone who has been around for years can easily see the difference in price movement now versus times of higher volume and volatility. But all anyone needs to do is ask the big six and seven-figures annual traders archived in older P&L threads here.

Ask lescor and red-ink and szeven and reardon metal and dustin and others if this year was a record-profits producer for them. I already know what the collective answer is... that is plain and obvious.

Financial markets are still tradable, but not nearly in the same manner as years past. It is a different game now, and it will be different still in the years to come. It always is

In all fairness, the VIX and volatility were decimated at several points during the 2003-07 upswing as well. At one point, we set a record for the longest duration of time for a 2% close lower...much of it, in hindsight, was facillitated by the credit bubble and the tightening of corporate spreads (implying all was hunky dory for 4 years, until it suddenly wasn't).

The point is that as the Fed takes over more of the economy and the central planning of said economy, the markets continue to lose their capacity to find an "equilibrium". The only volatility seems to come about as a result of some indecision about what the next balancing act of the Fed will be...what sector they will bailout or implicity support.

Politicians and bureaucrats now move markets, corporate earnings are background noise to whatever the central planners decide to do next.

 

[mm19]

short term traders are in big sh*t as algos destroyed edges permanently. And there is nowhere to hide.

Trading longer term is answer but 2012 felt like dead horse kicking. Also you need stellar win rate as length of trends will be mediocre and cant count that good 1 winner will clear all losers and pay you nice %. Also bump up your bet size

 

[Bob111]

Quote from Random.Capital:

There's nothing wrong with the US markets. They have never been more transparent and accessible than they are today.

give me a break..are you serious? what world you re living? what do you trade? how often?we have 60+ electronic marketplaces (ecn's,dark pools etc). and that's only for stocks... they all shoveling same stocks,that are use to traded on 2 exchanges..even SEC themselves admitted that they don't can can't control current situation on stock market...yes, you are reading this right-SEC said that while ago. maybe a year or so..

 

[Bob111]

Quote from Laissez Faire:

Could anyone please post a picture of a "typical" intraday chart pre-HFT and a "typical" intraday chart from today?

I don`t have access to that type of data right now.

What has changed? And what is ruined?

Markets still go up and down, no?

i did posted the pic's few years ago,trying to get the attention of the ET crowd..nobody give's a f** about it..now for whatever reason a lot of ET members are gone..ooops....
i posted pictures of intraday charts from past and present for stocks in range that i've been trading for years-100K-500K avg' shares per day.
the difference is obvious(at least to me). right now-there is no consistency, just random jumps up or down with periods like 5-30 min without any trade. charts on stocks with trading volume 100-500K shares or more now looks like 10K avg.vol. OTC stock back in 2003-05

 

[Laissez Faire]

Quote from Bob111:

i did posted the pic's few years ago,trying to get the attention of the ET crowd..nobody give's a f** about it..now for whatever reason a lot of ET members are gone..ooops....
i posted pictures of intraday charts from past and present for stocks in range that i've been trading for years-100K-500K avg' shares per day.
the difference is obvious(at least to me). right now-there is no consistency, just random jumps up or down with periods like 5-30 min without any trade. charts on stocks with trading volume 100-500K shares or more now looks like 10K avg.vol. OTC stock back in 2003-05

I`m very interested. Please post them again if you can.

My experience as a day trader is limited to the last years, so I keep wondering how things were in the good old days before the machines took over. I suppose stocks would be the best instrument for comparison.

I trade the ES and I know that it is dominated by HFTs, but I`m not sure if looking at ES data from 97 would give a meaningful comparison is it would for stocks. I don`t have that data anyway.

Someone once said that price still travels from A to B, it's just that the path travelled has changed.

Would that be accurate?

 

[themickey]

I'd post a EOD chart of S&P500 going back to 1973 if it were more easily straight forward to do so, but anyhow S&P500 price action looks no different then from now.
VIX looks slightly different going back to 1990, peaks and troughs are more shaply defined back then, now VIX looks to stall a bit and chop around on peaks and troughs.